A senior Bank of Canada official says that many Canadians believe that official inflation measures don't reflect the rising costs they face.
Deputy governor Lawrence Schembri said Tuesday the gap between perception and reality has become more pronounced during the COVID-19 pandemic.
Schembri said public trust and understanding are important factors for any policy actions the central bank takes to keep prices and by extension the economy stable. The central bank is in the midst of a review of the inflation target framework before renewing its agreement with the federal government for the next five years, just as it has done since the early 1990s.
Another issue that may be at play to explain the gap in perception versus measurement is that consumers don't factor improvements in things like electronics even as prices go up, he says, or that they base more of their perception on the rising cost of housing that has risen sharply in cities like Toronto and Vancouver in recent years.
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